Gods Gone Wild: Musk, Putin And Dogecoin

Gods Gone Wild: Musk, Putin And Dogecoin

Late last month, when Elon Musk was busy doing the same things he’s doing right now — namely, tweeting about cryptocurrencies — I suggested we were witnessing the early stages of the evolution outlined in “Gods.”

In that linked article, I wrote that “the exponential nature of wealth creation in a modern capitalist system” will likely mean that “a few fortunes will become so large, so fast, that the people associated with them will become gods,” beholden to no one — not regulators, not presidents, not nations.

Musk has made more than $25 billion on paper in the last six weeks. To reiterate: $25 billion in six weeks.

Musk’s move to put Bitcoin on Tesla’s balance sheet combined with his demonstrable capacity to move the price simply by tweeting about it (or merely by appending a Bitcoin symbol to his Twitter profile), means that accounting constraints notwithstanding, he can effectively move the “value” of the company’s “cash” position.

Accountants will quibble with that. I would too. But the figure (above) pretty clearly indicates that “quibbling” with Musk has been a losing proposition.

If he sells his products for Bitcoin, that opens another Pandora’s box. Namely, he can set the dollar price of a Tesla and influence the price of a dollar alternative which he accepts as payment for them.

Bitcoin neared $50,000 over the weekend. Proponents have pointed to all manner of other news flow (see here), but the bottom line is that Musk has played an outsized role in driving recent price action.

And it’s not just Bitcoin. Musk has, of course, also dabbled in pushing around the “value” of Dogecoin, a digital joke asset in the truest sense of the word “joke.”

The gyrations in the chart (above) are largely attributable to Musk, who, in addition to tweeting out Photoshopped images promoting the coin (prompting celebrities to follow suit), claimed to have bought some for his child.

On Sunday, he took things a step further. “If major Dogecoin holders sell most of their coins, it will get my full support,” he said, in a tweet. “Too much concentration is the only real issue in my opinion.”

In my opinion, that’s not the “only real issue.” The “real issue” is that Dogecoin isn’t a real thing. It’s a joke. But maybe not. Not when the richest person on the planet decides, unilaterally, that it’s real.

Fast forward 11 hours, and Musk took it up another notch still, tweeting that, “I will literally pay actual $ if they just void their accounts.”

To be clear, this isn’t an article about Dogecoin. I don’t care about the specifics of Dogecoin. What’s notable is that Musk has now gone beyond merely pushing around the “value” of what has, in essence, become a plaything of his. Now, he’s looking to influence the actual “fundamentals” (if that’s the right word), while simultaneously admitting (accidentally or not) that the entire charade is just that — a charade.

When you have to specify that you’re willing to “pay actual $,” the tacit suggestion is that what you’re alluding to isn’t worth any “actual $.” Otherwise you wouldn’t have to be so explicit about it.

Before anyone makes this point, let me preempt readers: I understand he’s referencing something specific and unique to cryptocurrencies. However, it’s hard to ignore the absurdity inherent in the language he had to employ. While acknowledging that this comparison is apples to oranges, one wouldn’t go to a Toyota dealership, walk up to a salesperson, and declare “I will literally pay actual $ for one of these cars.”

That makes for a nice segue. Musk wants to sell Teslas in Bitcoin. He has $1.5 billion in Bitcoin on the balance sheet. He’s proven his capacity to move the price of Bitcoin. Now, he’s seemingly alluding to some kind of scheme to alter the dynamics of a Shiba Inu-themed digital token. Which his toddler owns. And which he’s also proved capable of influencing.

This is a parody of a parody of a parody. Or maybe it’s not. And that’s the problem. When you command nearly $200 billion, you can do anything you want.

For example, over the weekend, Musk invited Vladimir Putin to chat with him on the audio app Clubhouse (which is becoming more popular by the day).

An apparently bemused Dmitry Peskov called the idea “interesting.” “First we want to figure it out,” Peskov said, adding that,

President Putin does not directly use social networks, he personally does not run them. In general, this is a very interesting proposal, but one must first understand what is meant, what is proposed.

You have to laugh. The Kremlin is just as bewildered by Musk as everyone else. We’re all asking the same question as Peskov. When Musk tweets, the entire world essentially responds just as the Kremlin did Monday: “In general, this is very interesting, but one must first understand what is meant.”

While rich people conversing with controversial world leaders isn’t anything new, I wonder whether it’s advisable from a national security perspective, for Musk to be setting up freewheeling chats with the most dangerous man on planet Earth.

All of this speaks to my pseudo-warning from August about the extent to which Musk (and Bezos and Zuckerberg) are poised to become unaccountable demigods.

The irony is, the only person in the world who’s probably richer than Elon is Putin. Maybe they can chat about that on Clubhouse.


 

20 thoughts on “Gods Gone Wild: Musk, Putin And Dogecoin

  1. When I was kid in Northeast Ohio learning to love skiing, my best buds and I had a saying: “Cockiness before the fall.” When Musk goes down, it’ll be hard and sudden.

    1. Yeah. Contra Gates, Bezos or Zuckerberg – who have generally been quite cagey/careful with their public profile – Musk is a loose canon. I’m not convinced his mental makeup is the best suited to being (officially at least) the richest man on the planet.

  2. Every cryptocurrency that hits a certain degree of public recognition will likely always hold some value. I agree it doesn’t make much sense, but neither does the possession of gold for most people.

    Hard to imagine someone in 50 years bequeathing their dogecoin to their heirs in a will, but if the name is still relevant and the supply still finite, why not?

    Nearly a decade in to bitcoin, i think we’re approaching a moment where it no longer makes sense to ask “why?” rather than “why not?”

    1. The “problem” (the joke) with dogecoin is that its supply is NOT finite. By design, it was meant to be very easy to create more/to mine. That’s why it’s a joke to bitcoin maximalists. Or even Bitcoin curious… 🙂

      1. I did a deeper dive into Dogecoin architecture – nothing serious, just trying to understand the algorithmic underpinnings – and one interesting tidbit is that it uses an ASIC-resistant hash algorithm, making the job of the would-be brute force monopolist much more expensive.

        I don’t think this changes your characterization of the thing; it’s a joke, albeit cleverly crafted, and I can’t see any niche where Dogecoin doesn’t have a few viable competitors. But, if one did want a digital equivalent to cash, then Doge is the smallest and probably the most well suited of perhaps five options on the market today.

        How do we tie this back to the motivations of the fledgling god? I have two hypothesis:

        Banker Elon: he wants to legitimize cryptocurrency by forcing governments to accept it (via entanglement with corporate balance sheets) and minimizing the chance of network dominance (by slowly pivoting away from the highly unstable Bitcoin monopoly); naturally he also wants to benefit, but as always, his main thrill is the ability to mold society in his image.

        Pedagog Elon: he wants to teach the millennials and iGen’ers who hang on his every word a few things about value and media of exchange; Dogecoin is a lab demonstration for his acolytes and a diversion from his increasingly sterile and de-Twitterized day job.

        Then of course there’s always the possibility that we’re dealing with Trickster Elon, who smoked a joint last night and tapped out whatever came to mind on Twitter. In my experience, Trickster Elon’s words are never out of line with his motivations, even when they’re impractical or untrue.

    1. If you mean the authoritarian populism torch, I don’t see Musk as a good bearer of that particular torch. He’s not likable; even the highly-educated technocratic coastal populations who rate him highly, do so either out of admiration for his success or agreement with his goals — but on an animal level, even those people aren’t inspired to blind confidence in him.

      I might be proven wrong; the man is, after all, a polymath, and it’s possible that he could use his brilliance to master social manipulation the same way he did to mechanical engineering, electrical engineering and then rocket science — but in my experience, soft skills are whole different ballgame that intellectual skills.

      1. Careful. Musk didn’t “master” the things you credit him with. He conned folks out of their dollars to allow him to hire folks who mastered those complex skills. Von Braun actually was a rocket scientist who can be rightfully credited with the design of the V-2 and the Saturn V. Musk did not design his company’s rockets. His employees did.

  3. In 100 years, if a person mounted their beanie baby collection or their SSD that contained 10 Bitcoin on a wall next to a Picasso or Babe Ruth baseball card would that be so crazy?

  4. SpaceX: FIRST commercial rocket company that lands rockets and reuses them (instead ULA BUYING Russian)…
    SpaceX: 42,000 Starlink satellites network being deployed to provide internet to all CORNERS of the world…
    SpaceX: In the works – Starship spacecraft out of Boca Chica TX, reusable spaceship, to take off and land on the Earth, Moon, MARS… he’s going to be on Mars with our without NASA. This started as a side project to the Falcon9 rockets.

    Tesla: First “real” useful electric vehicles…
    Tesla: Speeding up the shift of the ENTIRE automotive industry to EV now rather 30 or 50 years from now…
    Tesla: In the works: Reinventing battery tech away from cobalt, reinventing mining lithium to lower environmental foot print, becoming an energy company, fully auto driving tech

    This is not counting the relative “side” projects Hyperlink, Boring Company, re-inventing HVAC…

    I have no idea what Musk is getting at with his cryptocurrency tweets and investments. Maybe, like other projects he starts, his main goal is to get the world adopting/moving towards a technology he believes is the future.

    One thing is indisputable: he has proved himself over and over.

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